Efficient Pricing of Term Life Insurance Policies

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Let’s say you are 43 years old and you have seventeen years until your children are out of college and your mortgage is paid in full. You want to buy $500,000 of term life insurance to cover these expenses and leave some funds for supplemental income. When you get quotes on-line you quickly discover that you can get either level premiums guaranteed for 15 years or for 20 years. Since 15 years doesn’t go far enough, you decide on a 20 guaranteed policy with the assumption that you will cancel it at the end of 17 years. Your annual cost for coverage at preferred rates will be $605.

This probably seems to be a logical and cost efficient approach. However, when you think about it, you will be paying premiums for 17 years on a policy that is priced for 20 years and you will therefore end up paying too much for the period of coverage you really need, which is 17 years and not 20. AIG/American General’s Select-A-Term was created to solve this kind of problem. With Select-A-Term, you can, in most cases, pick the exact term period for your protection needs and pay for a policy that is properly priced for you.

In the example above, a 43 year old male would pay $605 dollars per year for a 20 year, $500,000 term life insurance policy. If he terminated it at the end of 17 years, his total outlay for the period would be $10,285. However, with a 17 year Select-A-Term policy, the annual premium would be $545 per year for a 17 year total of only $9,265 — or a net savings of $1,020!

To see if Select-A-Term and efficient pricing makes sense for you, please click here to run some specific quotes and compare your options. It’s fast, anonymous and accurate.